News
On February 24, KfW Bankengruppe (KfW) (AAA/Aaa/AAA) launched and priced an increase to the January 2016 Kangaroo it introduced in a A$600 million (US$600.8 million) transaction a month earlier. The A$400 million tap is the German's agency's fifth Kangaroo transaction of 2011 and adds to the A$2.1 billion it has already issued this year; KfW sold a total of A$6.3 billion of Kangaroo bonds in 2010, its record issuance year in the market.
AMP Group Finance Services (A/A2), which is guaranteed by AMP Group Holdings, issued a new fixed rate domestic bond. The deal has a March 2015 maturity, achieved its target volume of A$200 million (US$200.5 million) and priced at 155 basis points over semi-quarterly swap.
On February 23, Kommuninvest (AAA/Aaa) mandated and priced its second ever Kangaroo, a new A$200 million (US$200.3 million) three-year floating rate line. After completing an Australian roadshow in March last year, Kommuninvest debuted in the Kangaroo market in August, issuing a A$200 million five-year deal.
On February 23, European Investment Bank (EIB) (AAA/Aaa/AAA) mandated and priced a A$400 million (US$400.7 million) tap to the floating rate tranche of its May 2014 Kangaroo line. The tap brings the total line size to A$750 million outstanding in the floating rate piece and A$2.4 billion in the fixed rate note.
Macquarie Equipment Finance (MEF), a US-based subsidiary of Macquarie Group, priced its inaugural securitisation on February 21 with the issue of a US$341.6 million asset-backed securities (ABS) transaction in the 144A market. Because of the nature of the business, the issuer says the US market was the most suitable funding avenue for the deal.
More asset-backed issuance is expected to materialise off the back of the forthcoming first transaction of 2011, with borrowers saying they are pleased with the continuing recovery of the sector. Fund managers' appetites appear to have remained steady since last year, with calls for non-vanilla structures at the top of their list.
Three days after the February 14 publication of its annual results, Bendigo and Adelaide Bank (BEN) (BBB+/A2/BBB+) confirmed its plans to launch a three-year domestic retail bond issue. The transaction will be BEN's retail debut and also its first Australian dollar medium-term note (MTN) issue in any format since the merger of Adelaide Bank and Bendigo Bank in 2007.
Barclays Bank Australia Branch (Barclays Australia) (AA-/Aa3) completed a new dual-tranche three-year benchmark domestic bond on February 17. The line - the issuer's third ever public deal in the Australian market - comprises A$500 million (US$500 million) fixed rate and A$1 billion floating rate paper which priced at 140 basis points over swap and the bank bill swap rate (BBSW), respectively.
On February 18, Bank Nederlandse Gemeenten (BNG) issued a new A$200 million (US$202.3 million) seven-year Kangaroo bond in what was the borrower's first domestic market Australian dollar deal of 2011. BNG has been an infrequent visitor to the Kangaroo market since the financial crisis, with the new issue set to be just its fifth since 2006, although it is an active euro-Aussie borrower.
Moody's Investors Service (Moody's) has placed all four of the major Australian banks on review for downgrade, citing "the Australian banking system's structural sensitivity to conditions in the wholesale funding market" as the reason behind the possible loss of Aa1 status. The banks' New Zealand subsidiaries have also been placed under review.
Westpac Banking Corporation (Westpac) issued a new A$1 billion (US$1.01 billion) residential mortgage-backed securities (RMBS) transaction on February 18 in what was the first Australian securitisation of the year and the first from a big four domestic bank since late 2009.